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Front Page » Top Stories » Sports Scandal Blemish Could Hamper University Of Miami Fundraising

Sports Scandal Blemish Could Hamper University Of Miami Fundraising

Written by on September 1, 2011

By Scott Blake
The Nevin Shapiro scandal could take a toll on more than the University of Miami’s reputation, experts say — it also could take a bite out of the school’s multimillion-dollar fundraising efforts.

Like other private universities, Miami relies heavily on contributions from individual donors, businesses and other organizations. The school raised $158.9 million in fiscal 2010, ranking it No. 31 among 996 colleges and universities, according to a survey by the New York-based Council for Aid to Education, a nonprofit group formed to boost corporate support of education.

Experts say maintaining a good reputation is paramount in fundraising.

"They can’t afford to let this fester," Lauren Bloom, a consultant on business ethics, said about the scandal. "If it proves to be true that the university knew about it and did nothing, then the university is in for a very rough time."

A former Miami booster and a convicted Ponzi schemer, Mr. Shapiro claims he illicitly provided tens of thousands of dollars in cash, as well as cars, jewelry, nightclub outings, sex parties, yacht trips and other gifts to dozens of the university’s football players and other athletes.

The university’s football program has a history tainted by scandals, but this has the potential to be the worst. The news has created a public relations nightmare at Miami, and the school faces sanctions from a National Collegiate Athletics Association investigation.

As it stands now, the scandal should hurt Miami’s fundraising ability to some extent, but there could be a bigger impact if more damaging information comes out, said Michael Nilsen, a spokesman for the Association of Fundraising Professionals.

"I could see this having an impact for a couple of years, but I don’t see it having a major impact," Mr. Nilsen said. "But if it gets bigger, and becomes an institutional thing, or if it involves (University President Donna Shalala) it could have a bigger impact."

University officials refused Miami Today’s requests to discuss the scandal or its fundraising program, instead referring to statements about the scandal posted on the school’s web site.

"As a member of the University (of Miami) family, I am upset, disheartened, and saddened by the recent allegations leveled against some current and past student-athletes and members of our Athletic Department," President Shalala said in a statement.

"Make no mistake — I regard these allegations with the utmost of seriousness and understand the concern of so many of you," Ms. Shalala said. "We will vigorously pursue the truth, wherever that path may lead, and I have insisted upon complete, honest, and transparent cooperation with the NCAA from our staff and students."

There is a growing consensus among college leaders nationally that sports programs need reforms to improve academic and financial integrity, said Amy Perko, a spokeswoman for the Knight Commission, an independent group seeking such reforms.

In August, for example, the NCAA adopted one of the commission’s recommendations to require college teams to be on track to graduate at least half of their players in order to be eligible for football bowl games and NCAA championships, Ms. Perko said.

The commission issued a report last year that found that spending in college athletic programs is growing twice as fast as spending on academic programs, among other findings.

Among the commission’s recommendations:

nRequiring that financial reports — even for private schools — be made public and transparent.

nRewarding institutions that make academic values a priority.

nTreating athletes as students first and not as professionals.

Although there is widespread agreement among college and university presidents in support of such principles, the commission doesn’t know how many schools, including Miami, have actually adopted specific policies, Ms. Perko said.

Amid the current scandal, Miami’s alumni and donors say they are remaining steadfast in their support of the 15,000-student school.

"My support of the university is unwavering," said Dr. Edward Dauer, a member of the school’s Board of Trustees whose family is a major donor. Dr. Dauer refused to discuss specifics of the scandal, citing university policy.

The scandal "only strengthens my support," said attorney George Lott, a Miami alumni whose family is another major donor. "I think UM alumni, students and faculty will come together as a family and we will get through this together."

Mr. Lott said the allegations shouldn’t be given too much credence, noting that Shapiro is "a convicted felon" serving a 20-year prison sentence for masterminding a $930 million Ponzi scheme.

Mr. Lott said he believes other college and university sports programs have similar problems but Miami is being singled out.

"It cannot help but hurt (the school’s) academic reputation and its reputation in all respects," he added. "I think everybody should let this calm down, and let the NCAA and the school and its legal representatives sit down and sift through the allegations."

Mrs. Bloom, the business ethics consultant, said the university should move fast to limit the damage to its reputation. Otherwise, the scandal could impact the school beyond fundraising.

"I think it will make donors think twice about giving money. It also could make parents question whether they want their children to go to a school like that. And if students are smart, they’ll consider whether they want to go to school there," she said.

"If you’re a university, you want to make sure your program commands respect," she added. "And you want to make sure it operates in such a way that it doesn’t shock the conscience."

Mr. Nilsen of the Association of Fundraising Professionals agrees.

"Reputation is extremely important," he said. "The United Way program had a scandal and it took them a decade or so to recover."

One thing working in the University of Miami’s favor, Mr. Nilsen said, is that colleges and universities are somewhat different than nonprofit charitable organizations such as United Way that rely on donations because schools have "built-in" networks of supporters, such as alumni who may have strong connections to their alma maters.

"These are people who have been to Miami," he added, "and they know what it meant to their education, so they will be able" to think of the scandal as an isolated problem.To read the entire issue of Miami Today online, subscribe to e -Miami Today, an exact digital replica of the printed edition.